Saturday, 11th February 2017 at 12:59

The Walt Disney Company has increased its ownership in the operating group behind Disneyland Paris by a further 9%, boosting its stake to 85.7% amid reports it aims to secure a complete takeover of the long-struggling company.

Disney has purchased this additional 9% of the Parisian company’s stock from Kingdom Holdings, owned by Saudi Prince Alwaleed Bin Talal, who was involved in the resort’s earliest 1994 restructuring.

With Disney’s stakeholding in Euro Disney S.C.A. already at a heady 76.7%, up significantly following recent bailouts from its previously static 39.8%, this latest deal pushes its ownership to 85.7%.

Reports also state Disney will offer the same price — 2 euros per share — to remaining private shareholders. If they agree, this would leave only the further 1% stake held by Kingdom Holdings in its way to full ownership.

Upon the news, the share price jumped to a neat 2 euros, a 67% rise. For many more recent shareholders, a worthwhile payout indeed.

Euro Disney S.C.A. is the holding company of the group which operates the theme parks, hotels and other resort activities as Disneyland Paris. Set up in the late 1980s as a result of the agreement with the French government to build the resort, the group should have then paid rich dividends to The Walt Disney Company in licensing its characters and intellectual property.

Former Walt Disney Company CEO Michael Eisner at the opening of Euro Disney Resort in April 1992

With the group facing another financial meltdown after the November 2015 events in Paris city centre and further European economic and tourism upheaval, this could now be the moment The Walt Disney Company steps in to take over completely.

For fans and visitors, the effects could be monumental. As the full owner of the resort, The Walt Disney Company would be not only empowered to make more major improvements to its visitor experience but compelled, too.

This albatross of poor management, poor investment and the world’s poorest Disney park — namely Walt Disney Studios Park — would no longer be around someone else’s neck; Disneyland Paris would finally become The Walt Disney Company’s very own problem. Every single future unsatisfactory annual report would be a mark directly against the company and its ability to make its vast entertainment projects work. It would have to take action.

What would The Walt Disney Company have to do to fix Disneyland Paris? New attractions, major expansions and still-needed quality improvements all suddenly become viable options, not to mention even greater parity with the quality and product offer of the American resorts. This could be the start of a great big beautiful tomorrow, where everything changes.

Comments

Happy days, people, truly happy days! This is the news we’ve been waiting for. The Walt Disney Company bringing Disneyland Paris in-house will enable the French park’s financials to be protected by the deep pockets of the mothership. Meanwhile, CapEx will be similarly amortised against the much bigger Disney Parks & Resorts group, allowing Disneyland Paris to make more of the big investments it needs to protect its market position. And to cap it all, direct ownership makes a return to the dork age of low show standards last seen around 2013/14 vanishingly unlikely.

Suddenly that rumour about Star Wars Land being pencilled in for a 2022 opening at Walt Disney Studios Park seems much less fanciful (one wonders if it could even become the Carsland-equivalent to a “new DCA” -style ground-up rejuvenation & re-dedication (Perhaps even with a new name).

For Disneyland Paris’s 25th Birthday, The Walt Disney Company has given it and its fans the best possible present: a promise that, for Disneyland Paris, the best is yet to come.

They wouldn’t have to do annual reports though would they, because it’d simply be a subsidiary and wouldn’t be bound by regulations governing a public company (such as the requirement to publish and annual report).

What I’m getting at with that is, the endless losses and other things would be private and wouldn’t necessarily need to be reported anymore!

Although they may be listed in the TWDC’s annual report under a Euro Disney subsidiary.

It’s most likely to be good news: Disney don’t want struggling parks in their portfolio (See Disney California Adventure). Further, the massive Walt Disney Company has much stronger financials than the tiny, functionally independent EuroDisney SCA. That means the park won’t be forced to serve all its debt & obligations under its own steam, it’s instead just part of the broader financial obligations of TWDC. That gets the dead weight off the Parks’ shoulders almost entirely. Couple that with Disney not wanting parks to struggle and you have a recipe for a turnaround plan. You can expect a big injection of capital expenditure to kick off a new era and then more reliable investment more regularly over the long term to push up show standards and encourage repeat business (Disney’s US Parks cash cow is the repeat business from Annual Passholders and yearly visitors, Paris doesn’t do nearly as well in that regard at present because servicing its massive debt and other financial burdens limits investment opportunities, especially in lean years such as those caused by outside factors like tourism being depressed, which is when its arguably needed most).

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